Cramer's 'Mad Money' Recap: Snow White and the Markets

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"If you want to make sense of this market, you need to understand where investors are coming from," Jim Cramer told viewers of his "Mad Money" TV show Monday.

If the market is sending you mixed signals, he explained, it helps to understand what the analysts are saying and why they are saying it.

To simplify matters, Cramer used the analogy of Snow White and the seven dwarves to explain the different agendas that drive the market.

Cramer called the analysts in the first camp "Dopies" because they believe that market fundamentals are sound and that the Federal Reserve doesn't need to cut rates. These guys, he says, are bullish on just about everything.

The "Sleepies" are those who just woke up to the fact that we're in a recession and are often alarmist in nature.

The third camp are "Docs" -- intellectuals like Fed Chairman Ben Bernanke who are clueless of the rapidly changing market conditions.

Then there are the "Grumpies" who feel nothing can save the markets.

The "Happies" optimistically believe that everything will work out because the Fed has finally cut rates. Like the Dopies, they are bullish on just about everything, only for different reasons.

Meanwhile the "Sneezies" have already been "blown out" of the markets by being either overly bullish or overly bearish.

Finally, Cramer said all these camps are dueling over the "Bashfuls" -- those are who have been too shy to invest in this turbulent market.

Cramer said he hoped the Disney analogy will help homegamers better understand where analysts are coming from and make sense of the contradicting upgrades and downgrades that come out during the day.

Cramer puts himself in the "Happy" camp and is bullish in his outlook for the markets now that the Fed is on board.

Exxon's 'Hairy' Earnings

On the surface, Exxon Mobil's (XOM Quote) most recent record quarter may seem like a thing of beauty. But Cramer dug deep into the earnings to find what Wall Street refers to as "hair" -- one-time items that make a quarter look better than it actually is.

Exxon reported in the past quarter a $450 million gain from asset sales along with a $700 million inventory gain from international refining and marketing operations. Taking out these one-time items, Cramer said Exxon only beat earnings expectations by 5 cents a share.

At issue for Cramer was Exxon's paltry 1% production growth. Oil reserves are the future for oil companies, Cramer explained. Yet Exxon made more money from the higher price of oil than it did from drilling or exploring for more.

"A lot of Exxon's earnings came from its big buyback," Cramer said, "and that makes Exxon more of a bank than an oil company."

Cramer said he much prefers Apache (APA Quote), with its 9% to 12% production growth. "There's no reason to own Exxon," he said.

A 'Bald' Earnings Report

In contrast to Exxon-Mobil's "hairy" quarter, Cramer cited Intuitive Surgical's (ISRG Quote) recent earnings as an example of "going bald."

When investors look at Intuitive Surgical's earnings, they don't see one-time gains, but rather earnings that beat every metric Wall Street was looking for, he said.

Intuitive Surgical beat the estimates by 20 cents a share. The company reported accelerating revenue growth, with sales up 68% year over year. International sales were also strong, accounting for 26% of sales vs. just 22% in the previous quarter.

Recurring revenue also increased and now represents 43% of total sales. Demand for the company's core product, the DaVinci robot, was also strong. Wall Street was expecting Intuitive Surgical to sell 71 robots in the quarter, but the company shipped 78 systems.